India Inc seeks cut in corporate tax, pro-investment budget

New Delhi, Jan 11 | Updated: Jan 12 2005, 06:20am hrs
The finance ministers pre-budget session with leading industrialists was more of a listening session, claim industry leaders present at the meeting. The over two-hour session had in attendance all key officers of the ministry economic advisors, secretaries and the chiefs of excise and customs, among others to whom the industry leaders made their presentations.

Among those representing the industry were Mukesh Ambani (Reliance Group), Onkar S Kanwar (Ficci & Apollo Tyres), Jagdish Khattar (Maruti), Dr A K Mitra (Ficci), Sunil Bharti Mittal (Bharti Group) and Sunil Kant Munjal (CII).

Dr A K Mitra said that the finance minister had promised to get in touch with industry leaders again once the ministry crystalised its own thinking on certain key issues.

Mr Mukesh Ambani and Mr Sunil Mittal, representing the telecom industry, called for replacing all levies and charges licence fees, access deficit charge, spectrum charges with a single (service) tax. The contention was to bring down total charges from 35% at present to 10-15%.

Mr Ambani also called for bringing down duties for the oil and gas sector. Mr Onkar S Kanwar, among other things, called for widening of the tax base from 3 crore tax payers to 15 crore tax payers and the exercise of fiscal discipline by the government. The meeting also saw a strong pitch being made by Mr Sunil Munjal for the constitution of an infrastructure development board with public-private partnership.

Among the key issues raised by the industry chamber leaders, CII, Ficci and Assocham, were the need to set up regulatory mechanisms for ports, roads, power and airports. They also called for attracting greater FDI by removing procedural impediments and for pursuing a divestment policy with an eye to retire public debt. Setting up of task forces for 6 sectors textiles, construction, IT hardware, auto-components, BPO and food processing was also called for.

Other demands included the reduction of corporate tax rate to 30% from 36.6% and removal of MAT (minimum alternate tax); efforts to expand tax base by extending the purview of service tax and taxing agricultural income above Rs 5 lakh at a flat 15%.